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Nicht so zimperlich mit dem Intervenieren...


Reuters
Top German economist urges ECB forex intervention
Saturday February 7, 5:47 am ET


BERLIN, Feb 7 (Reuters) - The head of a leading German think tank, Ifo, said on Saturday the European Central Bank should intervene in foreign exchange markets to prop up the weakening dollar.

"If the dollar continues to weaken, the ECB must sell euros for dollars," economist Hans-Werner Sinn, head of the Munich-based Ifo research institute, told Der Spiegel news magazine. He said the ECB shouldn't be overly cautious.

"A central bank that wants to devalue (a currency) can on its own certainly have an impact on the market forces," he said. He said that studies have found that the ECB would have to sell $30 billion to cause a lasting 10-cent decline of the dollar.

He said the other way to counter the euro's weakness -- lowering interest rates -- was not advisable because the economy in the euro zone was about to recover and likely to see higher interest rates in the medium-term.

Group of Seven (G7) finance ministers and central bankers are currently meeting in Florida and discussing exchange rates.

Policy-makers in Europe have stressed the risks that the dollar's fall poses to euro zone exporters. A stronger euro makes euro zone exporters' products more expensive outside the currency bloc.

-->He said that studies have found that the ECB would have to sell $30 billion to cause a lasting 10-cent decline of the dollar.

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Blöder geht es glaube ich nicht mehr. Vielleicht kann den mal jemand die letzten Interventionszahlen der BOJ vorlegen...

-->Schöne Gelegenheit im Euro Long zu gehen!

-->Hallo, CG - bitte schreib' ihm doch persönlich: sinn@ifo.de

-->Let the dollar drop

Feb 5th 2004

From The Economist print edition


Some think the dollar has fallen too far. On the contrary, it has not fallen by enough

THE dollar is the world's dominant currency. Should the world therefore be worried by its recent plunge against other currencies? Plenty of people seem to think so. When central bank governors and finance ministers of the G7 economies meet this weekend in Boca Raton, Florida, the fate of the dollar will be high on their agenda. Since 2001 the dollar has fallen by 33% against the euro and by 15% against the Japanese yen. Currency traders around the globe will scrutinise every word from Boca Raton, looking for a signal that governments might act together to stem the dollar's decline. Many businessmen will be holding their breath as well.

This is understandable. Any shift in currencies produces winners and losers. And yet the real problem facing the world economy is not a suddenly weak dollar, but a dollar which remains, even after its recent decline, too strong. The drop in the greenback was inevitable and should benefit both America and other countries, because it will help to reduce America's vast current-account deficit, which is arguably one of the biggest threats to the global recovery. For the same reason the dollar should, and almost certainly will, fall further. But some countries are not prepared to allow the dollar to fall by enough to complete the necessary adjustment to America's finances.

America's current-account deficit stands at 5% of GDP, and most economists reckon that this percentage needs to be reduced by at least half. That would stabilise the ratio of America's foreign liabilities to GDP, which has surged in recent years. So far the dollar has fallen by 15% in trade-weighted terms against a broad basket of currencies. Nevertheless, after adjusting for inflation, its value is still close to its 30-year average. It may need to fall by another 20% over the next few years if the current-account deficit is to be halved.

American policymakers seem happy to let the dollar slide. Europeans, however, complain that the burden of adjustment has fallen disproportionately on their currency, the euro. As the euro has soared against the dollar, central banks in Japan, China and other Asian countries have bought dollars to hold down the value of their own currencies. By doing so, they financed over half of America's current-account deficit in 2003. Without that money the dollar would have fallen further.


Missing signals

In the short term, Asia might thus be seen as America's saviour. But in the longer term Asian governments are delaying a necessary adjustment by allowing America's deficit to loom large for longer. This is likely to lead to an even bigger and more dangerous build-up of American foreign debt.

The behaviour of Asia's central banks has also blunted the necessary market signals to which even America must, eventually, pay heed. The current-account deficit is a direct, arithmetical reflection of insufficient domestic saving. In particular, America needs to prune its government budget deficit. However, it feels even less reason than usual to do so. Normally, when a government's budget deficit swells so fast (to 4.6% of GDP this year, from a surplus of 2.4% of GDP in 2000) and its currency is falling, investors would demand higher bond yields to compensate them for the increased risk. That penalty gives governments both a warning and an incentive to borrow less. But Asian governments are devouring American Treasury bonds with little regard for the usual risk-return characteristics. As a result, bond yields are being held artificially low, subsidising America's borrowing spree.

This has allowed the Bush administration to point misleadingly to low bond yields as evidence that its budget deficit is not harming the economy, and to think that cutting the deficit is less urgent. President George Bush's plan, set out this week in his budget, to halve the deficit over five years is based on unrealistic assumptions and fantasy accounting (see article). A fiscal stimulus was justified when the American economy was on the brink of a deep recession in 2001, but now that the economy is booming again, borrowing needs to be cut.


Asia's game

In essence, Asian governments are buying American Treasury bonds in order to ensure that Americans can afford to keep spending money on Asian goods. This cannot go on forever. Despite their mercantilist instincts, sooner or later Asia's central banks will have to face the fact that they are holding far too many risky, low-yielding dollars. If they stop buying, it could trigger a sharp fall in the dollar and a jump in bond yields. Delaying the natural adjustment in the dollar and bond yields is likely to mean that, when the inevitable correction comes, it will be much more painful.

If financial markets do turn nasty, then everybody will carry some of the blame. Japan and China will be guilty of trying to block market forces and hence an earlier adjustment in America's trade deficit. With Japan's economy now growing faster than the euro area and its firms' profits surging, Japan can probably afford a stronger yen. Its continuing worry about deflation can be better addressed by printing more money. And China needs to allow its currency to move upwards, not just to help the rest of the world, but also to rebalance its own overheating economy. Without such a rebalancing, inflation or a property boom and bust could destroy growth. The Chinese might find it easier to accept such advice if they are given a seat at the G7 table, where they clearly belong.

The euro area is also far from blameless. Policymakers wring their hands about the “brutal” rise in the euro, yet the euro is still close to fair value against a basket of currencies. If Europeans are worried that a stronger euro will hurt their economies, then the solution is simple: the European Central Bank should cut interest rates to boost demand.

However, America must bear much of the blame for its failure to do anything to curb household and government borrowing and so boost saving. Its easy monetary and fiscal policies are now beginning to look reckless. The dollar's slide has rightly shifted some of the burden of economic adjustment on to other economies. Sooner or later, though, America will have to face up to its own responsibilities, too.

-->da flutscht der Kurs ja sofort in den Keller. ;)

Gruß von T.

-->>Blöder geht es glaube ich nicht mehr. Vielleicht kann den mal jemand die letzten Interventionszahlen der BOJ vorlegen...

oder soll ich mir selbst auf die Schulter klopfen, weil mein solides"Halbwissen" mich sinnvollere Schlüße ziehen läßt?

> $30 Mrd den Euro-Kurs um 10 cent drücken

*kopfschüttel*


Schüttelnde Grüße

J

-->Bart ab im Westen, oder was?

Das erinnert doch ein wenig an"Life of Brian"?! God shave the Queen.

Und hier musste ich grade brüllen:"head of a leading German think tank". Au weia - das soll unser Volks-Megabrain sein? Gute Nacht!

Ein von Steuerzahlern genährter Beamterich lebt von Prophezeiungen. Höchst spektaktulär und von Mega-Nutzen für die Welt auch die weiteren Prophezeiungen vom Professore für 2004 - hier eine Auswahl:

- BIP: +1,8%
- Exporte: + 5,7%
- Importe: + 4,4%
- Arbeitslosenquote: 10,2%
- Private Konsumausgaben: +1,3%
...

Für diese Zahlen haben wir den Professore und sein Team teuer bezahlt - also geht bitte sorgsam und pfleglich mit diesen kostbaren Erkenntnissen um!

Übrigens, meine bescheidene Prophezeiung für den Euro-USD Ende 2004 lautet:

1. Sinn & Duisenberg rasieren sich die Bärte gemeinsam => Bartschwäche im Euro-Raum => Euro-USD = 1.02

2. Sinn oder Duisenberg rasiert sich den Bart. => Bartneutralität => Euro-USD = 1.27

3. Keiner von beiden rasiert sich den Bart. => Absolute Bartstabilität => Euro-USD 1.53

Randbedingung: Weder Schorschl Bush noch Geerd Schröpfer lassen sich 2004 einen Schnurrrbarrrt wachsen.

Gruß
Tobias:-)

*mnmP = mit noch mehr Prophezeiungen, s.o.


<ul> ~ Noch mehr Nektar vom Napf der Erkenntnis gibt's hier:</ul>